Business news from Ukraine


Ukreximbank (Kyiv) and China Export and Credit Insurance Corporation (Sinosure) on April 17 signed a framework agreement on cooperation in Kyiv, a press release from the bank said. The agreement foresees that Sinosure will provide insurance support for those projects for the which applications were filed through Ukreximbank and contracts were concluded by Chinese enterprises in Ukraine. In particular, the matter concerns the implementation of construction projects in Ukraine and other countries, in which Ukreximbank is involved, as well as projects in the field of infrastructure, agriculture, energy, transportation, oil, gas and chemical industries.
The total limit of Sinosure financial insurance for use by Ukreximbank will be $500 million. The loan term will be set depending on the parameters of each contract and could reach 15 years, the report said.
“An agreement on cooperation for the first time signed between the Ukrainian bank and China Export and Credit Insurance Corporation is a landmark event, as it opens up great potential for expanding external financing channels for the key sectors of the national economy,” the press service of Ukreximbank said, citing chairman of the bank board Oleksandr Hrytsenko.
Sinosure is the official export credit agency of China, founded in 2001. Sinosure is the only state-financed insurance organization.

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The European Investment Bank (EIB) is considering Khrakiv region as one of the priority regions for cooperation in Ukraine and the bank is negotiating with Kharkiv authorities on the participation in the Safe City project, Head of EIB Resident Representation for Ukraine Jean-Erik De Zagon has said. In order to develop small and medium-sized enterprises (SME), it is necessary to create a good climate, De Zagon said at a briefing before the start of the Kharkiv SME Day Forum in Kharkiv on Tuesday.
The bank sees that in Kharkiv region there is indeed development in the medical field, as well as in the field of transport and education, much is being done to improve the infrastructure and living conditions, he said, adding that this is done thanks to the efforts of the local authorities and the bank.
His bank has already sent EUR 1.5 billion to the development of SME in Ukraine in general and plans to continue financing projects for SME,” the head of the EIB Resident Representation for Ukraine said.
Answering journalists’ questions, de Zagon confirmed that the EIB is negotiating with the authorities of Kharkiv on participation in the Safe City project.
The bank is at the negotiation stage. The bank has not yet reached any specific agreements, but we are moving very fruitfully along this path, de Zagon said.
Yesterday, in particular, he was shown a pilot dispatch center for city traffic control center that will be used for the road network and infrastructure to work well. The bank has already provided EUR 21 million for this and will continue to cooperate, he said.

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Kyiv is interested in developing defense cooperation with Cairo and offers Egypt cooperation in modernizing its air defense system.
The press service of the Ukroboronprom state concern reported on Thursday that cooperation plans were discussed by Ukroboronprom Head Pavlo Bukin and Director for Production of the National Organization for Military Production (NOMP) of the Egypt’s Ministry of Military Production Hassan Ahmed Abdel-Mageed at the IDEX 2019 international defence exhibition held in Abu Dhabi (the UAE).
“In accordance with the agreement, the Ukrainian side will provide proposals for the modernization of anti-aircraft missile systems and other air defense systems used by the Egyptian Armed Forces. Comprehensive modernization may include a complete replacement of the outdated element base with modern solid-state elements: along with the modernization of anti-aircraft missiles, this will allow increasing the range of target detection and destruction by several times,” the concern said.
According to the press service, the prospects for cooperation in the ammunition sphere were also discussed at the meeting.
“Currently, the parties are considering a project to establish a joint production of precision and conventional ammunition for artillery systems of various calibers,” the concern said.

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The National Bank of Ukraine (NBU) counts on continuation of cooperation of Ukraine with the International Monetary Fund (IMF) after the expiration of the currency Stand-By Arrangement (SBA), according to an inflation report for January 2019 posted on the website of the central bank.
The document, in particular, has the key assumptions for the macroeconomic forecast of the NBU for 2019-2021, including payments to the public sector from donors in 2019-2021 ($6.5 billion from the IMF, $1.6 billion each from the EU and the World Bank), along with the placement of government external loan bonds for $8.5 billion, will allow refinancing most of the payments on external obligations.
As reported, the IMF Executive Board, following a meeting on December 19, 2018, approved a new program of cooperation with Ukraine under the stand-by arrangement. The amount of the 14-month program is equivalent to SDR 2.8 billion, or about $3.9 billion. Some SDR 1 billion (about $1.4 billion) was provided immediately, while the remaining funds will be provided based on the results of the program reviews in May and September 2019. The NBU thus plans to raise some $4 billion from the IMF in 2020-2021.
In addition, at the end of January 2019, the NBU said that it had laid out macroeconomic forecasts for the country to place eurobonds worth $2 billion in 2019. Thus, the National Bank expects an increase in sovereign eurobonds in subsequent years to more than $3 billion.
As reported, Ukraine in October 2018 placed two tranches of eurobonds: $750 million five-year bonds and $1.25 billion 10-year bonds.
The yield on the five-year bonds was 9% per annum, and for the 10-year bonds it is 9.75%.
BNP Paribas, Citi, Goldman Sachs and J.P. Morgan acted as organizers of the issue.

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The Cabinet of Ministers has approved a draft law on ratification of an agreement on the development of cooperation with Turkey.
The government took a corresponding decision at a meeting on Wednesday.
According to the explanatory note to the draft law available to Interfax-Ukraine, the implementation of the document will favor the implementation of technical cooperation projects – the transfer of know-how, training of personnel, the supply of equipment and materials, and will also contribute to financial projects and grants to finance the supply of goods, equipment and materials.
The agreement also provides for the creation of a Programs Coordination Office of the Turkish Cooperation and Coordination Agency (TIKA) in Ukraine.

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Kharkiv-based JSC Turboatom and Westinghouse have extended a memorandum of understanding in the nuclear energy sphere for one year.
The press service of National Nuclear Generating Company Energoatom reported that the document was signed on November 7, 2018 by Turboatom Director General Viktor Subotin, Westinghouse Vice President and Managing Director Aziz Dag and Energoatom President Yuriy Nedashkovsky during the international fuel and energy forum held in Kyiv.
“The memorandum of understanding with Turboatom includes cooperation under the Ukraine-EU Energy Bridge Project. According to the memorandum, Turboatom will provide products and services for the turbine part of the project. Yesterday, the expansion of the current memorandum for another year was signed,” Dag told Interfax-Ukraine.
As reported, Westinghouse within cooperation with Turboatom continues to discuss preparations for the implementation of programs to increase the installed capacity of VVER power units and the capability utilization index, while activation of cooperation is possible when launching the Ukraine-EU Energy Bridge Project.
The government decided to implement the Ukraine-EU Energy Bridge pilot project in June 2015. The project envisages organizing the transmission of power from reactor two of the Khmelnytsky NPP to the EU power grid. The funds received from electricity exports from this reactor are planned to be used to finance the construction of reactors three and four of the Khmelnytsky NPP.
A consortium of companies, consisting of Westinghouse Electric Sweden AB, Polenergia International S.àr.l. and EDF Trading Limited, announced their intention to participate in the project of arranging the Ukraine-EU energy bridge.

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